When someone hears the word “probate” it may invoke feelings of fear, dread and anxiety. Clients come to us asking them to help them avoid probate. While there are certainly valid reasons to use estate planning strategies to avoid probate in certain situations, that is not always the case. Some clients create estate plans knowing that one day when they die their estate will be probated.
Costs
One of the fears about probate is that is becomes very expensive and decreases the assets left in the estate. Under Maryland law, probate and estate planning attorney fees are based on the total gross estate. For example, an estate valued at a minimum of $250,000 but less than $500,000 must pay $500 in fees, while an estate worth at least $500,000 but less than $750,000 owes $750. An estate worth $2 million but less than $5 million pays $2,500. Estates worth $5 million and up pay a $2,500 fee plus 0.2 percent on any excess over $5 million.
These fees do not include additional Letters of Administration, certified mail fees, filing a will for safekeeping, entering claims or caveat papers and plain, certified or exemplified copies.
Maryland statutes spell out the fees and commissions estate attorneys may receive for normal administrative tasks. The state formula for attorney compensation is 9 percent of the first $20,000 of the gross estate and 3.6 percent of the amount over $20,000. All such estate attorney fees are paid by the estate.
Lack of Privacy
This may be one of the most valid concerns to avoid probate. A will that is probated is filed with the Orphans court and is public record. Anyone who wants to access the file and read the will, the inventories, creditors’ claims and other paperwork can do so. For those who do not wish for their financial information to become public record, an estate planning attorney can create a trust or multiple trusts and fund those with all or a portion of your assets. Trusts do not get filed as public records. Those assets are not subject to probate but pass automatically to the beneficiaries you choose.
Time-Consuming and Energy-Draining
Another concern for many about probate is that the grieving family will be subject to a lot administration issues that take months or years to complete while draining them of their energy. Some estates are simple and straight-forward and some are not. The majority of them can be completed in about 9 months. The process does require inventorying assets and liabilities, notifying creditors, paying claims based on established priorities and then closing out the estate. The brunt of the work falls on the personal representative and the estate planning attorney, not other family members and beneficiaries. For this reason, it is important to choose your personal representative with this in mind. Make sure the person you choose is capable, trustworthy and will not be overwhelmed by grief.
For more information on setting the record straight about probate, contact the experienced elder law attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
